The thing is, I don't honestly know my risk tolerance right now. Age 58, spotty employment, getting closer to winning the game. New factors in my risk profile that I haven't experienced before. Thus you can hear the voice of caution in my more recent posts. I have never been a near retiree before.

Good to hear perspective from someone approaching retirement. My view (as someone in their 30s) is that the more risky I invest now, the less risk I will have to take when I am older and start needing the money. So I plan to be fairly aggressive the next 10-20 years, with the hope that the aggressiveness will be rewarded and I can stop playing the game or at least start scaling back sooner than later. If things don't work out I guess I will just save more and/or work longer, but at least for now time is on my side and I can wait out bear markets.

I sold $30k last week, and am moving to cash for $100k of my portfolio for now. That, in conjunction with a pension and two lump sum payments paying 7.5% and 8% in lieu of base-building merits, help me feel less exposed to volatility.

I also re-visited my IPS, and re-considered my AA going forward. The amount of reading I've done on glide paths and VWRs and SWRs and LMPs have convinced me that 80/20 is about right for me now.

The thing is, I don't honestly know my risk tolerance right now. Age 58, spotty employment, getting closer to winning the game. New factors in my risk profile that I haven't experienced before. Thus you can hear the voice of caution in my more recent posts. I have never been a near retiree before.

Good to hear perspective from someone approaching retirement. My view (as someone in their 30s) is that the more risky I invest now, the less risk I will have to take when I am older and start needing the money. So I plan to be fairly aggressive the next 10-20 years, with the hope that the aggressiveness will be rewarded and I can stop playing the game or at least start scaling back sooner than later. If things don't work out I guess I will just save more and/or work longer, but at least for now time is on my side and I can wait out bear markets.

I think you have a good plan. What I would advise is to allow flexibility in your thinking as the only constant seems to be change. Too often we think we can strategize things out twenty years in advance, having a plan is good but it isn't intended to be set in concrete.

Age and experience have increased my risk tolerance. Having been through ‘87 in my late 20s, then 2000-1, and 2008, I see that I lost no money. In all cases, I closed my eyes for a few years and found I’d made a lot of money. Dips and crashes are to be expected. I don’t much enjoy them, but enduring them is the price of benefitting from money in the market. I’m now 59, 70/30, and determined not to make the mistake that has cost me the most in my investing life: taking money off the table when the market is up, losing some of the upside ride, and not knowing when to get back in. For me, the less I do, the less I mess up.

Age and experience have increased my risk tolerance. Having been through ‘87 in my late 20s, then 2000-1, and 2008, I see that I lost no money. In all cases, I closed my eyes for a few years and found I’d made a lot of money. Dips and crashes are to be expected. I don’t much enjoy them, but enduring them is the price of benefitting from money in the market. I’m now 59, 70/30, and determined not to make the mistake that has cost me the most in my investing life: taking money off the table when the market is up, losing some of the upside ride, and not knowing when to get back in. For me, the less I do, the less I mess up.

I agree. I am 75/25 and heading to 70/30 for retirement in a few years. I don't expect to ever go below 70% stocks. Based on simple math, the 30% bonds should get you through any stock downturn. And I will have no pension and retire 17 years before I can collect SS (full retirement age).

The less I do . . . I noticed that my portfolio did pretty good during those years when I was gone on my military deployments, incommunicado and unable to hit the sell button to "fix" my holdings. Good luck with your investments and thanks for reading / cfs

Rebalancing with new contributions, I've been buying only bonds for the last couple of years ...

I've done the rebalancing with new contribs too. But also chaged AA as I realized my retirement date was sooner than I originally thought. No problems switching into bonds. I think it will be hard to actually spend retirement funds.

“The last two years of the bull markets are the best,” he said. “The minimum return of the last two years of the U.S. cycle is 30% minimum. So it’s very, very dangerous to be out of the market.”

"Higgins explained that looking at historic data, the median returns are even higher at 45%, indicating that traders courageous enough to hang on until the very end could scoop up possibly some of the strongest returns in the cycle."

“The last two years of the bull markets are the best,” he said. “The minimum return of the last two years of the U.S. cycle is 30% minimum. So it’s very, very dangerous to be out of the market.”

"Higgins explained that looking at historic data, the median returns are even higher at 45%, indicating that traders courageous enough to hang on until the very end could scoop up possibly some of the strongest returns in the cycle."

Despite crying in my root beer all weekend over a portfolio return of "only" 15.01%, I can't help but notice the tremendous power of this bull market. Since July 2013, I have been mildly rebalancing from stocks to bonds. It seems like all I have been doing has been hitting the "sell" button, selling stocks in wave after wave as the market advances. Sort of like the hedge growing faster than you would have ever dreamed possible and it seems like you have to trim it back almost monthly. A nice problem to have but if I was 35 years old, I would simply be enjoying the ride. At 58, it seems to be like that laurel hedge growing out of control, a big chore to maintain. This is because I am concerned about controlling my risk as I get older. Ah to be young again!

How are other older investors like me reacting to this? Am I alone in how I feel about this?

FWIW. I am selling a lot... I am waiting for the next big crash to get in at a lower basis and BUY a lot.. Also... I'm 36.

Despite crying in my root beer all weekend over a portfolio return of "only" 15.01%, I can't help but notice the tremendous power of this bull market. Since July 2013, I have been mildly rebalancing from stocks to bonds. It seems like all I have been doing has been hitting the "sell" button, selling stocks in wave after wave as the market advances. Sort of like the hedge growing faster than you would have ever dreamed possible and it seems like you have to trim it back almost monthly. A nice problem to have but if I was 35 years old, I would simply be enjoying the ride. At 58, it seems to be like that laurel hedge growing out of control, a big chore to maintain. This is because I am concerned about controlling my risk as I get older. Ah to be young again!

How are other older investors like me reacting to this? Am I alone in how I feel about this?

FWIW. I am selling a lot... I am waiting for the next big crash to get in at a lower basis and BUY a lot.. Also... I'm 36.

do you benchmark against a non-market timing portfolio?

for example, i create a benchmark portfolio of VT. i mirror contributions and trades in my real portfolio with the benchmark.

i'm curious how you would perceive the performance of a benchmark portfolio of VT without market timing in comparison to the real time gains of your actual portfolio.

depending on how much and and for how long you've been selling into this bull market in anticipation of a crash, your benchmark portfolio would probably start making you really nervous about catching up to it...

its easy to think you're winning the race when you aren't running against anyone.

Despite crying in my root beer all weekend over a portfolio return of "only" 15.01%, I can't help but notice the tremendous power of this bull market. Since July 2013, I have been mildly rebalancing from stocks to bonds. It seems like all I have been doing has been hitting the "sell" button, selling stocks in wave after wave as the market advances. Sort of like the hedge growing faster than you would have ever dreamed possible and it seems like you have to trim it back almost monthly. A nice problem to have but if I was 35 years old, I would simply be enjoying the ride. At 58, it seems to be like that laurel hedge growing out of control, a big chore to maintain. This is because I am concerned about controlling my risk as I get older. Ah to be young again!

How are other older investors like me reacting to this? Am I alone in how I feel about this?

FWIW. I am selling a lot... I am waiting for the next big crash to get in at a lower basis and BUY a lot.. Also... I'm 36.

do you benchmark against a non-market timing portfolio?

for example, i create a benchmark portfolio of VT. i mirror contributions and trades in my real portfolio with the benchmark.

i'm curious how you would perceive the performance of a benchmark portfolio of VT without market timing in comparison to the real time gains of your actual portfolio.

depending on how much and and for how long you've been selling into this bull market in anticipation of a crash, your benchmark portfolio would probably start making you really nervous about catching up to it...

its easy to think you're winning the race when you aren't running against anyone.

I should carify.. Selling a lot of Individual Equities. I'm also still actively buying indexes, but my cash position is a little bigger than it used to be... I am comfortable.. if anything I'll use this cash to wipe out a couple of Mortgages eventually.

Despite crying in my root beer all weekend over a portfolio return of "only" 15.01%, I can't help but notice the tremendous power of this bull market. Since July 2013, I have been mildly rebalancing from stocks to bonds. It seems like all I have been doing has been hitting the "sell" button, selling stocks in wave after wave as the market advances. Sort of like the hedge growing faster than you would have ever dreamed possible and it seems like you have to trim it back almost monthly. A nice problem to have but if I was 35 years old, I would simply be enjoying the ride. At 58, it seems to be like that laurel hedge growing out of control, a big chore to maintain. This is because I am concerned about controlling my risk as I get older. Ah to be young again!

How are other older investors like me reacting to this? Am I alone in how I feel about this?

FWIW. I am selling a lot... I am waiting for the next big crash to get in at a lower basis and BUY a lot.. Also... I'm 36.

do you benchmark against a non-market timing portfolio?

for example, i create a benchmark portfolio of VT. i mirror contributions and trades in my real portfolio with the benchmark.

i'm curious how you would perceive the performance of a benchmark portfolio of VT without market timing in comparison to the real time gains of your actual portfolio.

depending on how much and and for how long you've been selling into this bull market in anticipation of a crash, your benchmark portfolio would probably start making you really nervous about catching up to it...

its easy to think you're winning the race when you aren't running against anyone.

I should carify.. Selling a lot of Individual Equities. I'm also still actively buying indexes, but my cash position is a little bigger than it used to be... I am comfortable.. if anything I'll use this cash to wipe out a couple of Mortgages eventually.

Despite crying in my root beer all weekend over a portfolio return of "only" 15.01%, I can't help but notice the tremendous power of this bull market. Since July 2013, I have been mildly rebalancing from stocks to bonds. It seems like all I have been doing has been hitting the "sell" button, selling stocks in wave after wave as the market advances. Sort of like the hedge growing faster than you would have ever dreamed possible and it seems like you have to trim it back almost monthly. A nice problem to have but if I was 35 years old, I would simply be enjoying the ride. At 58, it seems to be like that laurel hedge growing out of control, a big chore to maintain. This is because I am concerned about controlling my risk as I get older. Ah to be young again!

How are other older investors like me reacting to this? Am I alone in how I feel about this?

FWIW. I am selling a lot... I am waiting for the next big crash to get in at a lower basis and BUY a lot.. Also... I'm 36.

Well, I guess you are even more worried than I am. I think really young investors like yourself don't need to be worried. You have an investment horizon of at least 30 years before retirement. The market has a long history of earnings catching up with and going past very high expectations. Those invested in the expensive "Nifty Fifty" stocks in the 1960's would have done okay if they just held on long enough. If you are older, you probably ought to be concerned about expensive markets. As valuations go up, risk goes up and future expected returns go down. Less future expected return in return for more risk.

In 1999 or 2000, John Bogle saw that bonds yielded 7% and stocks 1%. He estimated the 10 year return for bonds would be 7% and that stocks might get 2% return. He forsaw Price/Earnings contraction, which is exactly what happened and stocks were flat for the next 12 years. Forward P/E's based on estimated earnings were about 32 and trailing P/E's based on historical earnings were about 45. The historical average for market P/E is about 16. Of course, bond investors got their 7%. Bogle said that bonds were the steal of the century, you could effortlessly scoop up annual 7% returns with a low risk investment. Not bad when stocks, with a lot of volatility and risk, historically return 9%-11% a year. With high valuations and a possible reversion to the mean, Bogle couldn't see how stocks could achieve much more than flat returns. I am sure that Bogle couldn't help but notice the euphoria that was out there.

Today, bonds yield maybe 3% if you stretch a bit. US Stocks have a forward P/E of about 22. My guess is that trailing P/E is about 30. So not cheap, but not early 2000 either. Some optimism today but we are not seeing euphoria.

Age and experience have increased my risk tolerance. Having been through ‘87 in my late 20s, then 2000-1, and 2008, I see that I lost no money. In all cases, I closed my eyes for a few years and found I’d made a lot of money. Dips and crashes are to be expected. I don’t much enjoy them, but enduring them is the price of benefitting from money in the market. I’m now 59, 70/30, and determined not to make the mistake that has cost me the most in my investing life: taking money off the table when the market is up, losing some of the upside ride, and not knowing when to get back in. For me, the less I do, the less I mess up.

That is the way to think

"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

Sold my holding of MSFT yesterday after a long, 15+ year IIRC, relationship. Regret having to pay those taxes but will be paying off the mortgage and reducing my sequence of return risk entering retirement. Observed that MSFT was a top holding in most of the funds I own anyway.

What I will say is that I am glad that I have been rebalancing my portfolio since July 2013. I hated selling stock but I am glad that I did. My asset allocation was 66% stocks and 34% bonds and cash just before we saw this dramatic and recent downdraft. I just checked my asset allocation and it is exactly the same. Gee whiz, how can that be? My guess is that bonds have fallen a little bit too. It just doesn't make sense.

What I will say is that I am glad that I have been rebalancing my portfolio since July 2013. I hated selling stock but I am glad that I did. My asset allocation was 66% stocks and 34% bonds and cash just before we saw this dramatic and recent downdraft. I just checked my asset allocation and it is exactly the same. Gee whiz, how can that be? My guess is that bonds have fallen a little bit too. It just doesn't make sense.

Probably EOD balances Ned. Some brokers are slow to update mutual funds. Or more possibly the stocks erased 2-2.5% out of whack allocation to more "self-balancing act"

When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939

I just checked my asset allocation and it is exactly the same. Gee whiz, how can that be? My guess is that bonds have fallen a little bit too. It just doesn't make sense.

Hi nedsaid...Last month, when you posted the thread, I remember writing to you about it. What you seemed to be saying [what I inferred] was that you were feeling a little uncomfortable with a 'higher' equity allocation. My counsel was to take a little off the table, because the difference in return was not that great, all things considered.

Did you wind up doing anything? (note, I don't recommend any course of action right now)
Do you feel a version of 'buyers remorse'?
Knowing what you know now, would you have done something differently?

The hardest aspect of being an investor, at least for me, is to stay disciplined. The financial aspect was not difficult - it is just math. But the behavioral aspects....that is something totally different. How are you holding up?

“If you don't know, the thing to do is not to get scared, but to learn.”

I just checked my asset allocation and it is exactly the same. Gee whiz, how can that be? My guess is that bonds have fallen a little bit too. It just doesn't make sense.

Hi nedsaid...Last month, when you posted the thread, I remember writing to you about it. What you seemed to be saying [what I inferred] was that you were feeling a little uncomfortable with a 'higher' equity allocation. My counsel was to take a little off the table, because the difference in return was not that great, all things considered.

Did you wind up doing anything? (note, I don't recommend any course of action right now)
Do you feel a version of 'buyers remorse'?
Knowing what you know now, would you have done something differently?

The hardest aspect of being an investor, at least for me, is to stay disciplined. The financial aspect was not difficult - it is just math. But the behavioral aspects....that is something totally different. How are you holding up?

Well, pretty much I continued along my program of mild rebalancing from stocks to bonds. I have been doing this since July 2013 and the days of the "taper tantrum." I was thinking about taking more drastic measures if the markets kept zooming but I don't need to worry about that now.

Pretty much, I am taking this in stride. This has happened several times before and I have been through the two bad bear markets of the 2000's. I just have to be patient and wait for the markets to recover. I still have 7-8 years before retirement. I will just say that I am glad that I have been rebalancing, no regrets. When markets do crazy stuff like this, it always hurts but what are you going to do?

If I knew this was coming, I probably would have done another round of rebalancing. But my moves each time are pretty mild as my rebalancing bands are really tight now, maybe 1%. I am trying to keep my equity allocation from creeping up. If markets had kept zooming, I was thinking about going from 66% stocks down to 60%. If had just let my allocations ride since July 2013, my guess is that I would have gotten up to maybe 75% equities.

So life goes on. This weekend we had a funeral for a family member who passed away and found out another family member is expecting a child. Bigger things in life. As Grandmother always said, "It is only money."